Buy To Let Outperforming Most Asset Classes

AFS Team·27 March 2019·4 min read
Buy To Let Outperforming Most Asset Classes

Buy To Let Outperforming Most Asset Classes

Research has revealed that an investment in a buy to let property has outperformed just about every other major asset class over the past 10 years.

Most of this performance is down to increasing rental yields and the annual gains seen in rising house prices.

The findings from VeriSmart reveal that a BTL investment made 10 years ago would have delivered a 92% return.

In contrast, the firm says that investing in the FTSE 100 would have delivered the largest return of 119%.

Those who invested in a classic car at the time would have seen a 94% return while investing in a buy to let delivered better returns than gold investment which saw a 60% return.

Leaving cash in the bank delivered a 16% return, while fine art saw a 4% fall in the investment.

One of the most stable and best investments

The founder of VeriSmart, Jonathan Senior, said that investing in bricks and mortar in the UK is still one of the most stable and best investments currently available.

He said: "The buy to let sector is the property market's backbone in the UK and helps aspirational homeowners as they overcome the difficult financial barriers to home ownership."

He added that the Government should be doing more to solve the country's housing crisis and the sector needs more support, but it still remains a lucrative investment opportunity.

Mr Senior said: "With little being done to address affordability or property supply, then it's likely despite the government's efforts that there will be a demand for good landlords to provide quality accommodation for those needing it."

Cost of landlord licensing schemes revealed

Meanwhile, the cost of landlord licensing schemes is 'like a postcode lottery' for the rental sector in the UK.

According to Direct Line for Business, there's been a 61% rise in landlord licensing offences since 2015.

They also say there's a big variation in licence costs with prices ranging from £55 to £1,150.

Landlord licenses in Scotland and Wales are mandatory

Landlord licenses in Scotland and Wales are mandatory and one in six local councils in England have a scheme.

The research reveals that around 460,000 rental homes in England are currently being covered by a landlord licensing scheme.

Direct Line for Business's Matt Boatwright said: "Our research reveals that landlord licenses are a postcode lottery and there a range of costs for those signing."